By Kelly Schmit
Good credit union governance goes far beyond the board of directors to encompass several other parties, including CEOs, committees, task forces, credit union members and regulators.
Indeed, as I listened to Michael Daigneault, principal/founder, Quantum Governance, L3C, a CUES strategic provider, talk at CUES’ Directors Conference early last month, I began to understand the breadth of everything needing to be accounted for to move a credit union forward.
Daigneault said that credit union governance "is more about a complex web of stake holders, than any single group.”
He emphasized that the "village" of governance can be either:
- dysfunctional—it holds routine meetings that focus on past results;
- functional—directors ask pertinent questions, but watch the clock;
- responsible—a hands-on team doing regular board assessments;
- exceptional—does what a responsible board does, plus executes effective board composition, communication, and more.
Daigneault feels most credit union boards are at the functional level, and described how CUs can move their governance from functional to exceptional. Moving forward is a big job with several factors standing in the way. The Directors Conference audience shouted out a few barriers to being exceptional, including:
- having the wrong people on the bus;
- lacking the ability to work as a team and
- finding it problematic to shift from tactical to strategic thinking.
Daigneault agreed with these audience suggestions and added these additional challenges to exceptional governance that CUs must overcome:
- weak understanding of roles and responsibilities and
- not nimble, risk-taking organizations.
Daigneault says CUs need fundamental--not incremental--change to make a difference in their governance villages. This means robust governance committees; task forces with charters; plus policies and procedures to onboard, develop, and educate team members.
CUs should define what the ideal credit union board looks like five to 10 years from now, he suggested, and assess their boards on regularly. This definition of what the board should look like needs to include a section on board rejuvenation--as boards need both historical thought and new wisdom in the room.
Is your board dysfunctional, functional, responsible or exceptional? What are you doing to take it to the next level?
Kelly Schmit is marketing coordinator for CUES.
Read more about credit union governance on cumanagement.org and CUES' Center for Credit Union Board Excellence. Not yet a CCUBE member? Get a free 30-day trial CCUBE membership.
Also read more coverage of CUES' 2013 Directors Conference. Sign up for the 2014 Directors Conference, Dec. 7-10 in Palm Desert, Calif.
